Underwriting Donald Trump’s $175 million appeal bond when other insurers won’t is business as usual for a California financier. Don Hankey. As chairman of the Los Angeles-based Hankey Group of Companies, which includes an insurer, a high-end auto lender and a commercial real estate investment firm, Hankey has raised wealth loans for borrowers that other financial firms have shied away from.
Hanky’s help to Trump brought the little-known billionaire into the spotlight. But in recent years, several of his companies’ transactions have attracted the attention of the US Department of Justice, the Consumer Financial Protection Bureau and the California Department of Insurance. Regulators have taken action against Hankey’s companies four times since 2015, public records show.
For example, in 2017, the Department of Justice filed a complaint in federal court in California Westlake Finance, Hankey’s large subprime auto lender. With a network of 50,000 car dealerships and $3 billion in assets under management, Westlake Financial calls itself the “Yes! Yes! Lender.”
Westlake and its subsidiary, Wilshire Commercial Capital, illegally repossessed at least 70 vehicles belonging to military service members protected by the Military Civilian Relief Act, the DOJ said in the complaint. The companies paid $761,000 to settle the claims.
Five years later, the Justice Department is back with another one complaint v. Westlake, which claimed that it failed to provide the military with the interest benefits they were legally owed. The company paid $225,000 to settle the issue.
U.S. Attorney for the Central District of California, Martin Estrada, said in the settlement: “Service members make tremendous sacrifices, and we have a responsibility to protect their rights and ensure that they enjoy the full benefits of important law.” .
Hankey did not immediately respond to a request for comment.
The self-made Hankey is worth $7.4 billion Forbes, and its companies oversee $18 billion in assets, employ more than 3,000 people, according to the company’s website. Its seven financial institutions include Westlake, Knight Insurance Group, whose unit is a Trump-appealing bond, a commercial real estate investment firm and a provider of fleet financing for rental car companies. He is also a major shareholder in San Diego-based bank Axos Financial refinanced Some Trump loans in 2022 when other banks refuse.
An appeal bond granted to Trump by Hankey’s Knight Specialty Insurance prevents the New York Attorney General from collecting a $464 million judgment he won against Trump and his allies in a civil fraud case when he sued Trump. The judge overseeing the case found that the defendants had engaged in “continuous” fraud over several years.
According to consumer complaints filed with the federal Consumer Financial Protection Bureau against Westlake, some Hankey customers are less than happy with the company’s practices. Records compiled by the agency over the past year show a near-daily stream of customer claims against Westlake, including improperly repossessed vehicles, payments on loans the customer wasn’t registered for and failure to provide accurate loan balances and payment histories. credit reporting agencies. Such inaccuracies can impair consumers’ ability to obtain other loans, rent residences, or even secure jobs.
Customers who have fallen behind on their car loans also say Westlake employees called them repeatedly, complaint records show. “Even if I have a payment, they will still call up to 6 times a day, 7 days a week,” said one Florida borrower last month.
Hankey’s companies have also been subject to regulatory actions by the CFPB and the California Department of Insurance. According to the CFPB’s 2015 consent decree against Westlake and its affiliate Wilshire, the CFPB found that Westlake and Wilshire used illegal debt collection practices to pressure borrowers. About 176,000 customers were affected, the consent order said.
According to the CFPB, Westlake and Wilshire changed loan terms without telling borrowers, charging extra interest on the loans. The companies allegedly defrauded customers by manipulating callers’ IDs and posing as employees calling from flower shops or pizzerias, tricking borrowers into reclaiming their homes or vehicles. In other cases, Westlake collection agents led borrowers to believe that their cars would be released if they paid a certain amount, usually less than the full amount owed. After those payments were made, Westlake did not release the vehicles, the CFPB found.
Westlake and Wilshire neither admitted nor denied the findings, but paid clients $44 million and $4.25 million in fines.
KnightBrook Insurance was another Hankey company referred to by the California Department of Insurance in 2015 for a series of violations in the way it handled customer claims. The department reviewed 127 auto and lien protection claims handled by KnightBrook over the course of a year and found 45 state insurance code violations.
The alleged violations included failing to include payments in general damages settlements received by customers, “failing to conduct and diligently pursue a thorough, fair and objective investigation of the claim”; non-payment of salvage certificate fee; and failure to pay reasonable towing fees.
KnightBrook agreed with the state’s findings and said it “intends to implement corrective actions in jurisdictions where applicable,” according to the report.